Present trends of electrical energy supply and demand are not sustainable because of the huge gap between demand and supply in foreseeable future in India. The path towards sustainability is exploitation of energy conservation and aggressive use of renewable energy systems. Potential of renewable energy technologies that can be effectively harnessed would depend on future technology developments and breakthrough in cost reduction. This requires adequate policy guidelines and interventions in the Indian power sector. Detailed MARKAL simulations, for power sector in India, show that full exploitation of energy conservation potential and an aggressive implementation of renewable energy technologies lead to sustainable development. Coal and other fossil fuel (gas and oil) allocations stagnated after the year 2015 and remain constant up to 2040. After the year 2040, the requirement for coal and gas goes down and carbon emissions decrease steeply. By the year 2045, 25% electrical energy can be supplied by renewable energy and the CO2 emissions can be reduced by 72% as compared to the base case scenario. (C) 2010 Elsevier Ltd. All rights reserved.